The report in The Herald newspaper was published as Zanu-PF and the opposition party Movement for Democratic Change (MDC) held a second day of power-sharing talks in South Africa.

Mugabe won a landslide victory last month in a the second round of an election widely condemned by Western nations and the MDC and its leader, Morgan Tsvangirai, for government-sponsored violence and intimidation.

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The MDC says about 120 of its supporters were killed by Mugabe supporters and thousands more were injured in the aftermath of a first round of elections in March which were won by Tsvangirai.

The scale of the violence prompted Tsvangirai to pull out of a second run-off on June 27 which Mugabe then won, as the only candidate.

Mugabe, who has already been under US sanctions since 2003, has denied the claims and blamed the opposition and Western interference for the violence.

Bush also said the South Africa talks results in a new government "that reflects the will of the people".

He said the US would then be "ready to provide a substantial assistance package, development aid, and normalisation with international financial institutions".

The US president also authorised using up to $2.5 million from the US Emergency Refugee and Migration Assistance Fund to help Zimbabwean refugees and asylum seekers displaced by the violence.

On Tuesday, the European Union widened sanctions against Zimbabwe.

However, earlier this month, the Russia and China blocked a UN Security Council resolution to impose sanctions on Zimbabwe, led by the United States and Britain, in response to the violence.